Fabric to follow

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Walker Greenbank is reaping the benefits of being a dedicated follower of fashion.Reinvigorated five years ago by new management led by chief executive Charles Wightman, the group quickly dumped its 1980s image as a mini-conglomerate and concentrated on wallcoverings and fabrics.

The results have been distorted by disposals and acquisitions as the business was repositioned, but yesterday Walker reported a healthy 27 per cent jump in pre-tax profits to a record £9.02m, in line with the forecast at the time of December's £16.8m rights issue.

After the purchase of the Warner and Harris fabrics companies last year and the upmarket Cole & Son wallpaper company, Walker still has around £7.4m in net cash left. Even with up to £27m capital expenditure earmarked for the next two years, it expects gearing to be a modest 10 to 20 per cent by January 1997.

Despite a forecast that profits will rise to close to £11m, earnings will only creep ahead this year, putting the shares -down 4.5p to 102.5p yesterday - on a prospective multiple of nearly 16. That's not cheap but they remain a long-term bet on the £5bn European market.